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Gold and Silver Prices – Daily Outlook for September 3rd

September 3, 2013

Gold and silver rallied during most of July and August. But now that summer is over, will this recent recovery of precious metals hold up, or was it partly driven by light volumes of trade? In China, the final HSBC’s manufacturing PMI report came out for August and showed the PMI index rose to 50.1, which means the manufacturing sectors in China are progressing. This news may slightly positively affect commodities prices. Looking forward for this week, will gold and silver change direction and fall? On today’s agenda: Reserve Bank of Australia rate decision, U.S. Manufacturing PMI, Spain’s unemployment Change, GB Construction PMI, and Australian Retail Sales.

Here is a short overview for precious metals for Tuesday, September 3rd:

Gold and Silver Prices Review – September Update

On Monday, there was no trade in the CME due to Labor Day Holiday in the U.S. During August, gold increased by 6.35%; silver jumped by 19.61%.

In the chart below are the normalized prices of precious metals for 2013 (normalized to 100 as of July 31st). The prices of gold and silver have risen during last month.

The gold and silver futures volumes of trade have fallen in recent days and reached on Friday 141 thousand and 47 thousand, respectively. For silver, the volume is at its lowest since the beginning of August. If the volume will pick up this week, this could suggest the chances of sudden sharp move in the prices of gold and silver due to high volume will rise.

During last month, the U.S long term treasuries yields rose (10 year notes reached 2.78% yield by Friday); they have reached in August their highest level since late 2011. The relatively high yields may have coincided with the recent rally in gold and silver. These trends may suggest the market expects the Fed to taper QE3, which will reduce the pressure on long term yields and thus pull them back up.

On Today’s Agenda

U.S. Manufacturing PMI: In July, the index sharply rose to 55.4%; this means the manufacturing is expanding; this index may affect foreign exchange rates, commodities markets;

Reserve Bank of Australia – Cash Rate Statement: In the previous rate decision of RBA, it had reduced its cash rate by 0.25 pp to reach 2.50% – its lowest level in years, which contributed to fall of the Aussie dollar. The current expectations are that RBA will keep the interest rate unchanged;

Australian Retail Sales: This monthly report will refer to July 2013. In the previous update, the seasonally adjusted retail sales remained unchanged during June; this news may affect the Aussie dollar, which tends to be linked with commodities prices;

Spain‘s unemployment Change: the number of people unemployed in Spain fell again in July by 64.9k. This mean, the employment situation in Spain has slightly improved. If in the upcoming report the number of unemployed will decline again, this may pressure up the Euro;

GB Construction PMI: Great Britain’s construction sector in July 2013 improved again as the PMI sharply increased to 57 – the construction sector is growing at a faster rate. The upcoming report will refer to August;

Current Gold and Silver Rates as of September 3rd

Gold (short term delivery) is traded at $1,390.50 per t oz. a $5.6 or 0.40% decrease as of 08:09*.

Silver (short term delivery) is at $24.14 per t oz – a 2.67% increase as of 08:09*.

(* GMT)

Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):